Turkish economy shrinks by 4.2 percent in first quarter of 2001

Published July 1st, 2001 - 02:00 GMT

The crisis-hit Turkish economy contracted by 4.2 percent in the first quarter of 2001 from a year earlier after it was rocked by two major financial crises, the state statistics institute said Saturday, June 30. 

 

Gross national product growth figure for the first three months of last year was 4.2 percent, it said in a statement. The growth rate was 4.9 percent for the second quarter of 2000, 7.2 percent for the third quarter and 7.6 percent in the fourth quarter, the institute said. 

 

The contraction came after Turkish markets were battered by severe financial turmoil in November and February. The last crisis forced the government to float the Turkish lira, causing the currency to lose about 40 percent against the dollar and disrupting an anti-inflation program backed by the International Monetary Fund. 

 

To put the battered economy on track, the government has begun implementing a tough program of reforms, which received multi-billion-dollar support from the IMF and the World Bank on condition that the reforms are strictly implemented. 

 

Earlier in the week, Turkish Prime Minister Bulent Ecevit's three-party coalition ran the risk of a delay in the release of the next tranche of the IMF aid due to an inter-government clash over the appointment of a new executive board for the Turkish telecoms. 

 

The disagreement over the composition of the Turk Telekom's executive board was resolved Thursday ahead of a July 3 meeting of the IMF's board of directors, greatly relieving the volatile markets. 

 

"We have fulfilled completely and on time all the expectations of the IMF, World Bank and the industrialized G-7 countries," Ecevit boasted at a press conference Saturday. 

 

He noted that it was natural for the government to engage in discussions as it progressed in efforts to heal the wounded economy in what was regarded as a message to calm markets. 

 

"Everyone should be used to our habits and behavior by now. We are the democratic government of a democratic country. We discuss everything either among ourselves or in front of the public," he added. — (AFP) 

 

© Agence France Presse  

© 2001 Mena Report (www.menareport.com)

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